Yuval Levin and Adam Smith

https://www.futureofcapitalism.com/2010/01/yuval-levin-and-adam-smith

Yuval Levin's Bradley Lecture at the American Enterprise Institute in Washington Monday night, "Recovering the Case for Capitalism," has been generating some vigorous and skeptical discussion elsewhere in the blogosphere.

National Review Online's Jonah Goldberg has a post defending a rights-based view of capitalism against Mr. Levin's rejection of such a view: "I really like the utilitarian case for capitalism that Yuval offers, but I don't see how it's possible to put into practice without accepting a pretty broad individual right to commit capitalism, which depends on a robust conception of property rights. By property rights I mean the right to enjoy the fruits of your labor, among other things. Defining property and the limits of that right can be tricky and contentious. But dismissing that right out of hand is just plain dangerous. Worse, it's unjust."

And AEI's own Nick Schulz, co-author of From Poverty to Prosperity, writes, "It is not as clear to me as it is to Yuval that capitalism erodes the social and moral preconditions for its own success."

I watched the online video of the lecture. If you don't have an hour and 15 minutes to spend doing that yourself, here's a summary. Mr. Levin spends much of the talk focusing on Adam Smith, reporting that Smith wasn't just an economist but a moral philosopher who believed that capitalism would help shape character by encouraging discipline and the moderate virtures of prudence, restraint, industry, thrift, probity, punctuality, and self-control. Smith, as Mr. Levin puts it, saw capitalism as "an answer to the problem of avarice, not an unleashing of avarice."

Mr. Levin goes on to say that there is no serious economic critique of capitalism. But he says there are two moral critiques. The first, that it is unfair to the poor, he rejects, responding that capitalism has increased the standard of living of the poor and allowed many of those born into poverty to rise out of it. The second critique, that capitalism "leaves society morally bankrupt even as it grows materially wealthy," that capitalism is a "moneymaking machine that burns social capital as its fuel," Mr. Levin seems to find more compelling.

"Our capitalist age is not an age of discipline," Mr. Levin says. "Far from it. Our society is a study in unbounded appetite." He mentions that "our chief public health problem is obesity," and also talks of government deficit spending. "We lack for nothing except discipline," he says.

Some of these faults he blames on corruptions of Smith's vision of capitalism, including the expansion of the middle-class welfare state and growing collusion between big business and government, elements he says make capitalism less disciplining and less democratic than Smith had envisioned. Even so, when pressed on the point in the question and answer session, Mr. Levin says that the "decadence" of our modern society is not only because of the welfare state and business-government collusion but that it is also "exacerbated" by capitalism itself. "Smith was mistaken to think that capitalism could sustain itself morally," Mr. Levin says, adding later, "we need some other way to restrain ourselves."

What way is that? "We need social conservatism," Mr. Levin says. "It's simply essential to proper function of capitalist society." If he could put in an order for a religious revival in America, Mr. Levin says, he would: "We could really use one."

Jonah Goldberg asked about "rights talk" as a defense of capitalism, asking if such talk was helpful. "No, I don't think it is," Mr. Levin replies. "I don't think capitalism is primarily a matter of rights. It's not a function of natural rights." He said he was a critic of libertarianism. (For what it's worth, I tend to agree with Mr. Goldberg's suggestion in his blog post that it need not be an either-or proposition. After all, a strong property right can be a powerful restraint on government or on greedy individuals, and the essence of it is contained in one of the Ten Commandments, the one that says not to steal.)

Ross Douthat of the New York Times asked whether the Bush administration had done anything to counter the expanded welfare state Mr. Levin faulted. Mr. Douthat mentioned the administration's "ownership society" efforts to promote homeownership and its Medicare presciption drug benefit. Mr. Levin, who served in the Bush administration, acknowledged in response that the expansion of the middle class welfare state was "not curtailed" in the Bush years.

Mr. Levin gets the last word with a post at National Review Online responding to Mr. Goldberg, with Mr. Levin saying that Mr. Levin does, in fact, support property rights: "Capitalism is a way of protecting property rights and producing great wealth while also supporting a moral order that allows for civilized life. No economic system that failed to protect property rights would be legitimate, but no economic system that failed to support such moral order would be worthwhile."